Moving beyond nonprofit metrics

The article from Stanford's Social Innovation Review, Measuring Social Value, explained the difficulties in measuring social value across industries for a number of reasons. While the author's tool to guide internal decision making is beneficial. It left me with questions on how a foundation would evaluate the success of a NGO -- not just evaluating hard numbers but program effectiveness as a whole. The Skoll forum mentioned a key differentiator that foundations, philanthropists, etc should focus on: "evaluating program effectiveness in regards to it's mission vs. evaluating a program on it's organizational performance." It shared these five questions organizations should use to evaluate:

1. What are the most critical elements that signal that a nonprofit is deserving of a donation?
2. What is the most meaningful financial information that can help a donor determine a nonprofit’s ability to sustain their organization?
3. What is the most meaning non-financial information that can help a donor determine a nonprofit’s ability to successful implement programs that work?
4. What is the most meaningful information that can help a donor determine how much of a difference a nonprofit’s programs actual make?
5. Since much of the information of interest to nonprofit analysts is released only on a voluntary basis by nonprofits, how should they react when some charities share substantive information, revealing weaknesses and past failures, while the vast majority share no substantive information?

My opinion is that organizations should first work on answering the questions above then use that information to help generate what specific metrics will prove useful in determining how effective a program is. 

This leads me to wonder: How many NGOs have "failed" in the world because the wrong information was used to evaluate their performance?

Source: http://skollworldforum.org/2010/09/08/nonprofit-analysis-beyond-metrics/

Coping an innovation : The usual trap of emerging market

Still, I remember the smell of Goodwill store in Santa Monica Boulevard,LA when I first got there. It was really bad and bad, so I immediately came out and ran out. In fact, that was my first impression about Goodwill.

In my hometown, South Korea, we have similar organization which is collecting used household goods and clothing, fixing and re-sailing. But, the environment of that shop is quite different with Goodwill. The interior of shop is really nice and fancy and most of clerks are seemed like high educated person. Even, shop name is called as 'Beautiful store'.

After while, I got used to be familiar with Goodwill because I stayed in LA just temporary, so I couldn't buy new furnitures and many thing for this unstable stay, so I had to buy many living things from there. From this shopping experience, I found some differences between Beautiful shop and Goodwill. 

 First, in Beautiful shop, I could rarely see customers and many times, that space was filled with many clerks, not customers. Also, that shop doesn't have many used things, but I could see many new things. However, new things were tricky to buy although it had a nice shape and cheap price. Because, most of them was not ordinary living things. Actually, it was something very hard to find usages and probably, from the warehouse for olds directly as a company's donation. 

Second, unlike Goodwill, most of clarks are volunteer so, they didn't get a salary from shop. As a result, they didn't know about how to manage a shop and not kind for customer  Actually, they seem like from a wealthy family and not fitted into used shop so, probably, they didn't understand a their customer's focus which is that buying good one with low price. For this reason, there was no real life and community although everything is very nice and fancy, even smell. 

Unlike Beautiful shop in South Korea, I can see the smile of clerks and can feel their enthusiasm in Goodwill LA. One time, one of hispanic clerk recommended that I should apply Goodwill's hiring system and explained like that it's one of best way to get a job in US competently. 

I can dare say it was another style of copy cat. But, the essential part of Goodwill wasn't there. Only, the basic idea and external development were there and they missed many thing such as job training, employment placement services and revitalizing local community. 

However, this organization is getting grow because many powerful people like officers and politicians heard about the positive result of Goodwill, think our society should have this kind of nice organization like an good looking accessory and support money for this copycat. 

After realizing this, I can enjoy Goodwill's bad smell since it's much better that the smell of wasting money and chance. Now, the founder of Beautiful shop is trying to be the next president with the empty fame. Personally, he is really good person, well educated and gracious. However, I can't believe he could bring real innovations to South Korea. 

Venture Philanthropy: The Light for Social Enterprises

Investment and Involvement

The target of venture capital is traditional for-profit enterprises, while venture philanthropy’s target is the start-up social enterprises. Venture philanthropy not only provides financial support for the investee but also provides management, human capital and technical support. In addition to monetary measurement, venture philanthropy also emphasizes social impact.  Unlike venture capital, venture philanthropy focus more on capacity building. It is often the case that investors for social enterprises involve in daily management of the organization, and sometimes take positions in the social enterprise.

Venture Philanthropy in China

I learnt this word from the organization where I interned with in Shanghai called NPI. It is a leading organization in China which runs business in the field of non-profit incubator, venture philanthropy and CSR consulting. NPI collaborates with Lenovo Greater China on the Lenovo Venture Philanthropy Program which is mainly focus on sponsoring young social entrepreneurs. In addition to venture capital, Lenovo China offers its professional resources to assist in training and public practice for college students who are interested in social entrepreneurship. NPI helped Shanghai Civil Service Bureau to initiate a venture philanthropy program in 2010. The Shanghai Community Services Venture Philanthropy Competition sponsors innovative ideas to improve and transform Shanghai's community service.

Besides, foreign practitioners also facilitated venture philanthropy in China. LGT Venture Philanthropy, founded by the Princely Family of Liechtenstein/LGT Group in 2007, expanded its Smiling World Accelerator Program to China in late 2012. This program aims at strengthening capabilities of social enterprises and improving their core business areas. 

 

Moral Dilemma

Since social enterprises are determined to resolve social issues and expected to bring positive social impacts, should venture philanthropists have lower standard while making investment?  Should the criteria for supporting a social venture be the same with a traditional for-profit venture? If investors reject to provide funding to a social venture which does not have a satisfying business model, and the social venture closed down as result, who should to blame, the social enterprise or venture philanthropists?